risk luck

The role of risk and luck in our lives seems to be underrated. This observation was prompted by a discussion about the development paths taken by different nations. We had observed (and were wondering) why nations with distinctly similar geographies and resource endowments ended up on different development paths. While we all agreed that leadership and institutionalism were important aspects in the outcomes that different nations achieved, my colleagues did not seem to believe that luck also played a role in these outcomes.

First to risk. In simple terms, risk is what remains after you have accounted for all possible events and outcomes. But the world is driven by tails. That means that a few random variables (events) account for the majority of outcomes, and in many cases we are not able to anticipate those variables. Take the corona pandemic for example. I am sure that when we woke up on January 1st, 2020, we had great plans and ideas about what to accomplish in the year. But then Covid-19 happened. As I write this, more than 34 million people have contracted Covid-19 and there have been over a million deaths. Not many ordinary souls could have foretold the impact of this disease. That it would lead to a lockdown and fundamentally change the way we lived and did things (at least for now). Such events are called long tails because they do not happen every day.

Now that you understand risk, how about we take a look at luck? Did I say that my friends scoffed at the role of luck in individual and national outcomes? The reason why they scoffed at this is because as human beings we are too arrogant to accept that luck plays a part in the outcomes in our personal lives. Take the example of any successful businessman. They will tell you how they worked so hard to achieve what they did. So it sounds rude and condescending to tell them that along the way they had some luck! So people tend not to respect the power of luck.

So Covid-19 happened. You just happened to be this obscure epidemiologist doing unrewarding research into viruses in some unimpressive laboratory in Mulago or Entebbe. You also just happened to be specializing in corona viruses! Suddenly you are the go to chap in this wildly confounding situation. It takes a bit of luck to have been in such a position. Statistically speaking, your chance of being that fellow is about 0.00017%! I do not have the space to explain that so just take it. Suddenly your life changed by an event you had no role in producing.

Now let’s put risk and luck together. In 1981, a one Yoweri Museveni led a rag tag gang of “bandits’ into the bush. It was a very huge and badly calculated risk (at that time). Their chances of success were so minuscule. For the next four years they remained largely that – bandits.  At least that is what Milton Obote called them. Then an accident happened. David Oyite Ojok, the then army chief of staff happened to die in a helicopter crash. The biggest achievement of the guerillas up to then had been to keep their effort going and to survive the onslaught of the equally brutal national army.

Since history is written by the victors, there is little acknowledgement of this stroke of luck. But as they say, fortune favors the brave. The accident in question was a long tail event. In short order, the regime unraveled and following the Nairobi “peace jokes” the NRA marched onto Kampala.

The National Resistance Army had “made their luck”. The conditions of the time favoured them over all the other rebel groups because they were better organized and had a cogent vision and objectives to which they stuck. Many things went wrong until one thing went right. That, in golf is called the “rub of the green”. It is how the world really works.

Samuel Sejjaaka is Country Team leader at Mat Abacus Business School. Twitter @samuelsejjaaka